An Empirical Study on GP Selection by State-Owned Funds of Funds: A Multitask Theory Perspective = 多重任务理论视角下 国有 母基金 选择 GP决策的实证研究.

다국어 초록 (Multilingual Abstract)

This study investigates how multitask theory guides the investment decisions of government-tied funds of funds (GFoFs), which need to balance dual objectives of driving regional economic growth and generating investment returns. With unique data from Fund F, a state-owned FoF, this paper examines how multitask theory governs GFoFs’ GP-selection, specifically analyzing their two-stage procession from watchlist to picking.Drawing on multitask theory, this paper proposes two hypotheses: First, as government-tied limited partners (LPs) prioritizing regional economic development, GFoFs prefer GPs with both strong track records and significant investment allocation in target regions. Second, to fulfill their dual objectives, GFoFs prefer GPs with high investment focus and strategic consistency.Using manually collected GP data matched with Fund F's internal records, this paper construct variables with GP level characteristics (historical performance, regional investment scale, reputation) and firm-level events (investment behaviors and outcomes). Regression models with GFoFs investment decision making as the independent variable, reveal that GPs with larger proportion of investment in core industry, better investment return, less “style drift” are more likely to be selected, in line with the GFoF's dual objectives.To further validate the framework, this paper compares firm-level investment behaviors between "picked" and "non-picked" GP groups. Results indicate that picked GPs exhibit greater strategy stability, adhere more closely to core regional industry policies, and demonstrate less "style drift" driven by policy incentives. Additional textual analysis of Fund F's internal due diligence reports corroborates these findings.This research empirically demonstrates multitask theory is suit for GFoFs decision-making, offering actionable insights for policymakers and practitioners managing state-backed investment vehicles with dual mandates.